Aluminium giant Rusal shares collapse after US sanctions

Moscow (AFP) – Shares in Russian aluminium giant Rusal collapsed on Monday after Washington targeted it with sanctions, putting the metals major at risk of defaulting on part of its debt.

On the Hong Kong stock market, one of the exchanges where Rusal’s stock is listed, it closed 50 percent down at HK$2.34.

The fall wiped more than 3.5 billion euros ($4.3 billion) off the market capitalisation of the company which is headed by billionaire Oleg Deripaska and accounts for some seven percent of the world’s aluminium production.

In Moscow, the other exchange where its shares trade, they were down 23 percent in midsession business.

The meltdown came after US President Donald Trump on Friday announced sanctions against Russian oligarchs close to Vladimir Putin following the diplomatic crisis sparked by the poisoning of former spy Sergei Skripal.

Washington has accused Deripaska of operating for the Russian government. Other magnates hit by sanctions include the director of state-owned energy giant Gazprom, Alexei Miller.

Moscow on Monday said it would support Russian companies affected by the sanctions.

“We take great care with our leading companies… In the current situation, as their position becomes more difficult, we will offer them this support,” deputy prime minister Arkady Dvorkovich was quoted as saying by news agencies.

Support measures had already been discussed with the companies ahead of the imposition of the new sanctions, he said.

In a statement, Rusal said the sanctions “may result in technical defaults in relation to certain credit obligations of the group”.

The sanctions follow weeks of tit-for-tat diplomatic measures between Russia and Western states following the poisoning of a Russia former double agent in Britain last month.

The health of Sergei Skripal, the former Russian spy who was found slumped on a bench with his daughter in the English city of Salisbury, is now improving.

The US said however that Friday’s action was taken under a law passed to punish Russia for its alleged bid to interfere in the 2016 US presidential vote, as well as its intervention in conflicts in Syria and Ukraine.